Sony buys out Ericsson for $1.5 billion

Sony this week announced it would take full control of mobile phone maker Ericsson.

ByMatthew ShaerOctober 28, 2011

A Sony Ericsson Xperia phone is tested at a tech fair in Japan. This week, Sony announced it was taking complete control of Sony Ericsson.

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In 2001, Sony joined forces with Ericsson, a Swedish mobile phone manufacturer, yielding a joint venture called Sony Ericsson. This week, Sony announced it would take full control of Ericsson, in a deal reportedly worth roughly $1.5 billion. Sony reps positioned the acquisition as a matter of synergy – now the company can more fully integrate its smartphone and consumer electronics lines.

"Its the beginning of something which I think is quite magical," Sony CEO Howard Stringersaid at a press conference in London, according to Reuters. "We can more rapidly and more widely offer consumers smartphones, laptops, tablets, and televisions that seamlessly connect with one another and open up new worlds of online entertainment".

So what does the takeover say about the smartphone market at large? Well, over at GigaOm, Bobbie Johnson notes that the move "underlines how Europe’s mobile credentials have fallen away in the last few years." He points out that just a couple of years ago, the top four mobile phone makers were in Europe and Asia – Nokia and Sony Ericsson in Europe and Samsung and LG in South Korea.

"Today," Johnson writes, "Nokia’s share is falling so fast it’s been forced into an alliance with Microsoft, while Apple, China’s ZTE, HTC and Research in Motion have all overtaken it – and in smartphones it’s even further off the pace. Europe might be a voracious consumer of mobile, but it’s clinging on by its fingertips in the technology race."

This week, of course, Nokia introduced the Lumia 800 and the Lumia 710, the first Nokia phones to run the Windows Phone OS. They are due on US and European shelves in early November. Speaking to the New York Times, an analyst called the Lumia line "a new start for the company. This helps stop the bleeding and will help Nokia get back in the game."

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